By Barbra Murray
Meridian Capital Group has landed $240 million in financing on behalf of The Hakimian Organization, owner of the office building at 636 11th Ave. in Manhattan. Hakimian will use the proceeds from the loan to refinance the 560,000-square-foot property.
Meridian secured Hakimian’s 10-year CMBS loan through JP Morgan Chase Bank N.A., according to New York City records.
Hakimian has owned 636 11th, currently appraised at a value of $428 million, since acquiring the 11-story tower in 2005 for $95 million. Originally developed in 1910 to house the Auerbach Chocolate Factory, the structure was converted from an office/warehouse property to an office asset in 2007. Today, 636 11th serves as the global headquarters of advertising and public relations firm Ogilvy & Mather, which occupies the building in its entirety under a lease scheduled to expire in 2029.
Hakimian’s new interest-only loan carries a maturity date of 2029 and will replace a $210 million loan held by MUFG Bank.
Just as industry experts anticipated, the stable CMBS market seen in the U.S. in 2017 has continued into 2018. “CMBS conduit originators have steadily gained market share over the past several quarters, as tightening spreads have allowed them to issue very competitive quotes,” according to a first quarter 2018 report by commercial real estate services firm CBRE. The pace of CMBS originations actually went on the upswing in the first quarter, accounting for 24 percent of non-agency loan production compared to 21 percent in the fourth quarter of 2017, and 16 percent year over year.
Recent CMBS transactions in the Manhattan office market over the last six months include ZAR property NY’s refinancing of 64-68 Wooster St. with a $48 million loan arranged by Meridian through Citi Real Estate Funding.
Image courtesy of Meridian Capital Group